By Anton Bridge and Rae Wee
TOKYO (Reuters) -From the launch of new products and services in Japan to facilitating leveraged trading bets, crypto exchanges and some financial firms are rushing to cash in on rising investor enthusiasm for digital assets amid hopes of easing regulations.
The recent surge underscores a higher appetite for riskier investments in Japan as inflation outpaces wage growth and overrides a wariness around crypto investments that followed serious security breaches at exchanges in 2014 and 2018.
Japanese investors’ crypto assets surpassed a record 5 trillion yen ($33.16 billion) at the end of July, jumping 25% from just a month earlier. The price of bitcoin - the dominant holding - rose only 15% in yen terms over the same period.
Holdings have since drop…
By Anton Bridge and Rae Wee
TOKYO (Reuters) -From the launch of new products and services in Japan to facilitating leveraged trading bets, crypto exchanges and some financial firms are rushing to cash in on rising investor enthusiasm for digital assets amid hopes of easing regulations.
The recent surge underscores a higher appetite for riskier investments in Japan as inflation outpaces wage growth and overrides a wariness around crypto investments that followed serious security breaches at exchanges in 2014 and 2018.
Japanese investors’ crypto assets surpassed a record 5 trillion yen ($33.16 billion) at the end of July, jumping 25% from just a month earlier. The price of bitcoin - the dominant holding - rose only 15% in yen terms over the same period.
Holdings have since dropped marginally to 4.9 trillion yen as of end-September.
Industry players are now positioning for growth to pick up pace. Regulatory changes under discussion could bring in yet more retail investors by potentially cutting tax paid on crypto gains and easing curbs on trading using borrowed money and asset securitisation.
‘CONSIDERABLE OPPORTUNITY’
“There are around three times as many people with securities accounts as crypto accounts, so there’s still a considerable opportunity,” said Satoshi Hasuo, representative director and executive officer of exchange Coincheck .
“Next, we have to think about how we’ll win these people over,” Hasuo said.
CJ Fong, Asia Pacific general manager at crypto market maker GSR, said the firm has also been engaged in more talks this year with Japanese exchanges and financial firms, mainly to provide greater liquidity across a spectrum of digital assets.
The burst of activity shows how Japan is re-establishing itself as a major crypto market as industry players capitalise on the boost the industry has had globally under U.S. President Donald Trump.
“The Trump administration has spurred the Japanese government and regulators into adopting a friendlier approach to crypto, so Japan doesn’t fall behind,” said Noriyuki Hirosue, CEO of exchange Bitbank.
According to a report by crypto data platform Chainalysis, Japan ranked 19th out of the top 20 nations in crypto adoption globally this year.
NEW PRODUCTS AND ENTRANTS
Established exchanges are developing products and services in anticipation of regulatory changes that would tax digital-asset gains like those of securities and allow crypto investment through products such as ETFs and tax-free investment vehicles.
The Japan Financial Services Agency is refining rule changes, which will then be debated by parliament and, if passed, would come into effect in 2026 or 2027.